Definition:
Assessed value is the dollar value assigned to a property by a local government for tax purposes, determining how much property tax an owner pays.

Example:
For instance, Emma’s city assessor determines her home’s assessed value is $350,000. If her city taxes properties at 1.5%, she’ll pay $4,500 annually in property taxes based on that assessed value.

Explanation:
In real estate, local governments or tax assessors calculate a property's assessed value, which may differ from market value (the price a buyer is willing to pay). The assessed value considers factors like property size, location, condition, improvements, and recent comparable sales within the area. Typically, local tax assessors perform assessments periodically—often every 1–3 years. Changes in property assessments can increase or decrease property taxes, affecting homeowners’ annual expenses.

Homeowners can appeal an assessment if they believe it inaccurately reflects their property's value, potentially reducing their tax bill.

Importance:
Understanding assessed value matters significantly to homeowners and potential buyers. Higher assessments increase property taxes, impacting affordability. Buyers should review assessed values before purchasing to estimate ongoing costs accurately. Sellers benefit by understanding how assessments affect their property’s attractiveness and affordability to buyers.

In short, the assessed value is a critical financial consideration influencing property ownership costs, taxes, and buying decisions, making accurate understanding essential for informed real estate choices.